More COEs available in next three months

SINGAPORE – A total of 11,019 certificates of entitlement (COEs) will be available in the August-October quota period, 5.6 per cent more than the current three-month supply – a development which should continue to cool an overheated market.

The increase has largely to do with

an extraordinary adjustment announced in May.

In the move, the Land Transport Authority effectively brought forward some COEs from projected peak-supply years. In total, 1,025 such COEs were pumped into the August-October quota – all for cars.

Individually, all the COE categories will see increased supply, except for motorcycles, which will have a 9.2 per cent drop in supply to 2,957.

The category for smaller, less powerful cars will have 3,785 COEs, or 12.7 per cent more. Buyers and sellers of bigger, more powerful cars will have 2,816 COEs, or 5.7 per cent more.

The Open category, which is a proxy for bigger, more powerful cars, will have 777 COEs, or 4.4 per cent more.

In all, car buyers and sellers will have 7,378 COEs for the period, or 9.1 per cent more than now.

Meanwhile, the commercial vehicle category will see a 66.4 per cent jump in supply to 684 COEs.

Industry watchers said the bigger quota followed an increase in the number of vehicles deregistered in the preceding three months.

While this is expected to temper prices, they said bolder measures are needed for COE prices to ease further. These include removing private-hire, car rental and car-sharing bidders from the bidding process, introducing a cap on their fleet sizes, and prohibiting unfettered conversion of such cars to private passenger vehicles.

Mr Neo Nam Heng, chairman of diversified motor group Prime, said he was expecting the quota increase to be more significant, going by the number of deregistrations in recent months. “But if the pace of deregistrations continues, I am confident the next quota (November-January) will be even bigger.”

Meanwhile, he said, the increase in supply for August-October will bring “much relief” to motor traders, and he expects prices to fall by around 5 per cent. “We are approaching the year-end, when companies traditionally rush to meet sales targets,” he said, adding that some traders will also be rushing to beat a new car emissions standard kicking in next January.

Mr Nicholas Wong, general manager of Honda agent Kah Motor, said: “I see this as the beginning of the recovery of COE supply. Things should be looking up from here on.”

But motorcycle retailers were disappointed with the supply shrinkage for their category.

Mr Norman Lee, owner of motorcycle workshop Race Werks, said the bringing forward of COEs from the future is only for cars – “nothing for motorcycles, when motorcycles do not cause congestion”.

He is hoping there will be more expired COEs arising from traders who have certificates in hand but have not found enough buyers yet.

With the validity of secured motorcycle COEs shortened now, traders who hoard certificates are likely to see some COEs expire before they can find a buyer.